UPDATE: FinCEN has given notice of its appeal in the Smith case: the lawsuit that led to the current nationwide injunction that makes Beneficial Ownership Information (BOI) reporting voluntary under the Corporate Transparency Act (CTA). If the court grants FinCEN’s appeal and lifts the injunction, BOI reporting would again become mandatory. In that event, the government has informed the court that FinCEN plans to implement a 30-day filing extension and “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities.”
Given the U.S. Supreme Court’s prior decision to stay a similar injunction in Texas Top Cop Shop Inc., it would not be surprising if the Fifth Circuit Court of Appeals follows suit and grants the government’s request in this matter. But how FinCEN ultimately defines “low-risk entities” remains to be seen.
Therefore, as we have advised for several months, reporting companies should continue monitoring these proceedings, consult with legal counsel, and be prepared to file a BOIR when and if required.
This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions. When it matters in Michigan, we are the trusted legal advisors for businesses and individuals.
Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.